How to overcome your estate planning blues: "it takes time, costs money, raises difficult family issues, and revolves around something most of us do not want to think about—death."

USA Today (Society for the Advancement of Education), July, 2004 by David Yeske

IT'S A HEART-WRENCHING STORY of the disastrous consequences of failing to do even basic estate planning: The client of a financial advisor had a $2,500,000 estate and two children from his first marriage. However, he owned everything in joint tenancy with his second wife and had named her as beneficiary of his financial accounts, despite repeated warnings that, should anything happen to him, everything would go to his second wife--and nothing to his kids! When he died unexpectedly at age 48--his estate plan still unrevised--his first wife was forced to sue just to get college tuition money for their two offspring.

Although most individuals don't have multimillion-dollar estates, the same principles apply whether an estate fills a modest apartment or a 50-room mansion. When you die, you want your worldly possessions to go to those people and charities you love, and that takes careful planning. If you fail to do so, or plan incorrectly, the courts may step in to determine the distribution of your property in accordance with that state's laws--a distribution that may not fit your or your heirs' wishes.

People procrastinate doing estate planning for many reasons, but one of the most common is that it deals so intimately with death. Who wants to draft a will and perhaps create trusts and implement other strategies when most of those strategies won't go into effect until the person no longer is around? Others simply delay because death feels a long way off and there's no urgency. One financial planner discovered that a new client had no will. He was open to drafting one, but didn't want to bother until after he and his wife returned from a three-week trip to Russia. The planner urged him to complete it before they left. He refused. The man died the day they returned from overseas, and probate took two years.

Another reason people put off estate planning is that they don't recognize its importance. Families often assume it is merely about saving estate taxes, and most figure their estate is either too small to be taxed or that recent tax laws have eliminated such fees. The fact is, estate taxes remain, and though Congress raised the amount of estate value that is exempt, many individuals are more vulnerable to these expenses than they realize.

Even if your estate is not large enough to be subject to taxation, estate planning provides other benefits. They include minimizing or avoiding the cost and delay of probate; providing for the care of dependent or disabled children; controlling assets before and after death; reducing the emotional and financial burden on heirs; limiting feuding among heirs over the estate; maximizing the amount available for charitable contributions; and ensuring the continuation of a family business.

Estate planning oftentimes dredges up prickly family conflicts. Parents may disagree about who should serve as guardians of their children if both parents die, or which personal possessions and financial assets are to be passed on to which heirs. Not surprisingly, second marriages are a major source of inheritance conflicts. Wealthy parents often worry about corrupting their children by simply passing on their wealth at death. They want their kids to earn their own way in life, or they may have one or more offspring they don't trust with money--perhaps an alcoholic, drug addict, or spendthrift. Estate planning sometimes involves divulging what your estate really is worth, and talking about money is taboo in many families.

Couples avoid the entire process because they hate working with attorneys, or they do not wish to spend the time, or they simply refuse to pay for it--an attitude that can be very costly in the long run. One couple had $15,000,000 in real estate they wanted to pass on to their children but they faced a potentially large estate tax bill. They refused to either borrow against the property or sell some of it in order to buy sufficient life insurance to cover the expected taxes. When the surviving spouse died, the real estate market was in a downturn mad the estate was forced to sell most of the property at fire-sale prices just to pay the taxes.

To overcome excuses for not planning your estate, ask yourself a few questions: Does it make a difference where my worldly possessions go after I die? Do I want to leave my spouse or other heirs financially secure? Do I care how much, if any, the Federal and, possibly state government receives from my estate? How will my heirs feel about me if I die without having drafted a will? Do I want to influence or control how nay heirs handle or view money? Do I want to share some of my assets with those I love while I'm still alive?

Perhaps the biggest motivation is to recognize and accept the inevitability of the passing on of your estate. Smart financial planners and attorneys are blunt about it: Everyone dies. It's only a matter of when and whether you leave behind a well-constructed plan or a costly mess. Moreover, planners and lawyers often bring an objective perspective to any emotional roadblocks you may have, as well as addressing the often intimidating financial and legal issues.